Monday, April 7, 2008

Well, folks, this will probably be my last post to the blog. Myself and the rest of our group returned safely to our homes on Friday, April 4, and our grand adventure is at an end.

While two weeks in four countries was quite an amazing feat, it was ever so nice to get to Dallas, Texas, for my last flight home. I'm sure the Customs and Border Security people thought I was a little nuts with my ever-present grin, but at least I got through security with all my luggage and souvenirs and made it to my connecting flight without a hitch.

It was strange, though, to say goodbye to "the boys." I've come to think of them as my surrogate dads, uncles and brothers. And it was just odd to get on a plane and not see Chet, or David, or Richard, or Steve or even Russell smiling from a seat near the wing and talking to some stranger seated next to them about wheat supplies.

I've learned so much about the international wheat trade, and about our domestic production and use. But, more importantly, I learned a lot more about the world and our neighbors to the south.

Latin America is a great opportunity for U.S. wheat. The people are warm and welcoming and their economies are growing. With larger middle classes comes more wheat consumption. And, as a large producer that's only a boat ride away, the United States can fill that growing wheat demand.

In the coming weeks, I'll be writing up in-depth articles on the trip, country by country, for the print version of High Plains Journal and Midwest Ag Journal. And, I encourage you to follow along and send in comments and questions along the way.

Thank you for reading along with our travels and for all of your comments and prayers. We'll see you around!

Friday, April 4, 2008

First, the Canimolt Offices, where we discussed wheat concerns with Mexican Millers.Then, a group shot of our trade team members with members of Canainpa, or the Mexican Bakers Association, as well as a photo of an art piece made entirely out of breads.From there, it was to the offices of U.S. Wheat Associates in Mexico City, and here Richard Starkebaum reviews a map of the country of Mexico.Our USW trade team and our hosts at CONTRI watch a BNSF railcar unload its cargo of Kansas wheat at the CONTRI facility in Mexico City.And, finally, the view from our hotel of surrounding Mexico City. The city is home to 22 million people. (Journal photos by Jennifer M. Latzke.)

Thursday, April 3, 2008

On our final day in Mexico City our trade team met with the Mexican Bakers Association, or Canainpa, as well as the leadership of APPAMEX, the Mexican Grain Traders Association and took a tour of the CONTRI railcar unloading facility on the outskirts of Mexico City.

The Mexican Bakers Association is mostly concerned with consumption of wheat products in the country. Wheat in Mexico has to contend with cultural traditions of corn tortilla consumption. Also, many doctors in Mexico, according to the bakers, recommend people cut their consumption of wheat breads when attempting to diet. And, with the high cost of wheat and flour, smaller mills have to be careful not to price their products out of the range of the poor in Mexico.

Our final stop of the tour was to the CONTRI facility, where we learned about the rail car shuttles that travel from the U.S. to Mexico for unloading. The CONTRI facility is family owned and can move about 120,000 metric tons at one facility, or unload a shuttle in 19 hours. CONTRI handles wheat, corn, sorghum and some soybean meal, from the United States. Their main market for the wheat they bring in from Kansas, Oklahoma and the rest of the High Plains is their own flour mills. They also serve as a rail unloading facility for larger companies looking to move wheat into Mexico via rail.

Following our tour of the facility, the gentlemen of CONTRI treated us to a traditional Mexican meal, before we departed for the States.

One lesson's for sure. Those in the Mexican wheat industry are passionate about their business and it's that passion that will ensure that U.S. wheat will continue to have a strong presence in Mexico for years to come.

Our group spent Wednesday and Thursday (April 2 and 3) in Mexico City meeting with millers and bakers who use U.S. wheat.

On Wednesday, we started the day with the Mexican Millers Association or Canimolt. Mexico City has 92 various millers, which process about 5.2 million metric tons of wheat and produce 4.1 million metric tons of wheat flour each year. The millers have a capacity of 8.027 million metric tons of production.

On average, Mexico produces about 3.6 million metric tons of wheat, and usually imports about 2.8 million metric tons of wheat from the U.S. each year to meet its demand. Mexico is the sixth largest buyer of spring wheat in the world for the U.S.

An interesting fact to note is that Mexican farmers produce more durum wheat than the country can use or export. So, they use it for animal feed. It's not a quality issue, just that the Mexican farmers find that durum wheat is easier to grow and yields more than hard red winter wheat. In 2006, Mexico exported nearly 213,000 metric tons of durum to Italy for pasta production.

Life after NAFTA for Mexican producers has changed. They switched out a lot of land from wheat production and turned it into fruit and vegetable production, which are higher value crops.

We moved from the offices of Canimolt to the offices of the Altex Group for a discussion of the transportation and logistics of moving wheat from the United States to Mexico with Armando Rosales. From there it was a late lunch with the Mexican Millers Association.

One thing I discovered today is that the business world in Mexico City runs on a schedule that revolves around the overwhelming traffic here. With more than 22 million people in one city, it's a trial just to get anywhere, let alone anywhere on time. And, Mexican businessmen break around 3 p.m. for a two-hour lunch and really enjoy socializing. I don't know how they do it. If I had their schedule, I'd be exhausted.

Oh wait, I'm on a trade mission that's covered four countries, two continents, seven plane rides, six hotels and umpteen thousand miles. I am on their schedule and I am exhausted!

The plan was to fly from San Jose Costa Rica to Houston, Texas, and then back to Mexico City, Mexico. In theory, we had plenty of time to make it through customs and border control in Houston. In reality, we barely made the plane before they closed the jetway door.

All is well, though. Our group held up the plane long enough for everyone to board, and we took off and made it to Mexico City without a further hitch.

Well, there was the issue of a missing suitcase for Steve Mercer, but luckily it found its way to the hotel before our morning meetings. And, sure, I picked up a nasty hacking cough in Costa Rica, but it's nothing a little cough syrup can't take care of.

All are minor details in the grand scheme of things! Mexico City is unlike anything I've ever experienced. It's 22 million people. Flying over the city in the plane at night the sight was simply amazing. The lights of the city just went on and on and on over the horizon. I've been to Las Vegas, I've been to New York City, but Mexico City is larger than both put together. It's amazing.

And, the size of the city is also good news for U.S. wheat farmers. The population is continuing to grow a taste for wheat products, even though corn tortillas are culturally the bread of choice. The United States is the top supplier, by far, of wheat into Mexico. Coming in second is Canada.

All over Latin America, the message we've found is about the same. Emerging middle classes are developing a taste for wheat products, be they pasta or artisan breads, and U.S. farmers can fill that niche nicely.

Tuesday, April 1, 2008

Here's a few photos of our Costa Rican day. Starting off with some lasagna noodles coming off the line at Pasta Roma. Then, a shot of the milling facility at Molinas de Costa Rica.

Here, Richard Starkebaum and David Clough speak with the folks from Musmanni and Pinova, Jorge Pacheco, president and Tomas Acuna, general manager. And, of course, a tray of fresh pastries straight off the line.

Monday, March 31, 2008

We spent Monday (3/31) learning about the milling and baking industry here in San Jose, Costa Rica. Costa Rica imports 100 percent U.S. wheat, and is a good trading partner with the U.S.

Our first stop this morning was at Pasta Roma Prince, with Manuel Enrique Cordero, the general manager. We learned a lot about the high quality pasta industry and were treated to a tour of their updated plant. The plant's equipment was brought in all the way from Italy. Pasta is a popular meal for Costa Ricans, but is still outpaced by rice and bean consumption, so bakers and pasta makers have room to grow. Pasta Roma is the second largest pasta company in Central America and uses exclusively durum wheat from North Dakota.

From Pasta Roma, we drove to nearby Molcrisa, which is the largest flour mill in Costa Rica. Molcrisa has had a long relationship with U.S. Wheat Associates and has 55 to 56 percent of the market in Costa Rica. It's still privately owned by the family that began it, and in speaking with Don Luis Ruenes, the general manager, they are happy with U.S. wheat. So much so that they continue to buy exclusively U.S. wheat even though in December he paid the most for wheat he's ever paid in his lifetime. Their quality control department, led by Montserrat Castro Bolanos, puts a premium on U.S. wheat for the consistent quality flour they can produce with it.

Our afternoon included a stop at Panaderias Musmanni, and a tour of one of the largest bakeries in Costa Rica. Musmanni and its partner Pinova, manufacture more than 170 different bread products. They range from frozen dough for the Subways, Quiznos and Outback Steakhouses all over Central America, to cake mixes, pasteries and fresh products for Musmanni franchises and supermarket chains in Costa Rica. We toured the facility with Tomas Acuna, general manager, and visited with Jorge Pacheco, president of Musmanni. They use spring and winter wheats from the U.S. and like the quality they get from the U.S. (On a side note, the trade team got to sample some of the really great treats after our tour. Always a good thing to ply farmers with sugar!)

Our last stop of the day was to Pasta Vigui, a pasta maker in Costa Rica looking to expand into niche markets. They've created a Ramen-style noodle dish that is not fried, and therefore is fat free, Kosher and includes a complete list of daily vitamins for families on the go. To develop this product, the company had to design an entirely new piece of machinery that dries the noodles in a half hour, rather than frying them like conventional Ramen noodle makers. We chatted with Jorge Viguez Jimenez, president, and Carlow Gonzalez, finance director. And, we got to sample some of the various products the company has developed for Costa Ricans who are developing a taste for Chinese-style convenience food.

Tomorrow we leave Costa Rica for Mexico City. It'll be a long day of plane travel from San Jose to Houston, Texas, then back down to Mexico City, but we're all ready. Three countries down, one to go!

Keep those comments coming and thanks to everyone for their good wishes!

Sunday was our day off here in Costa Rica. And, while some of our group decided to stay by the pool and get some sun, a few of us decided to try something different—a tram ride through the rain forest canopy.

So, myself, Steve Mercer, Richard Starkebaum and Steve Wirsching found ourselves on a tour bus with 20 strangers headed into the rain forest of Costa Rica. We drove high up into the mountains outside San Jose, to the Aerial Tram. Our first stop was at a swinging rope bridge, which I'm told was a lovely view. Since I ran across the bridge to get to the other side before what I was sure was certain death, I didn't really pause to take in the sights! From there, we stopped and had lunch of traditional Costa Rican fare, under a canopy in the rain forest. And then, it was off to the tram ride through the canopy.

I always thought rain forests would be like they are in the movies—with Tarzan swinging through the trees on vines, and howler monkesy swinging on limbs. But, this was so incredible and so much more. There was a peace up in the canopy, when the tram would stop and the guide would quit talking, that was just awesome. Granted, the only wildlife we saw that day was a sloth by the tram entrance, but we saw orchids and all sorts of plants that you just don't find in Kansas. It was simply amazing.We also had time for a short hike through the trees. We saw a group of leaf cutter ants. These ants can't see and navigate by smell of the trail they leave. If they get diverted, they lose their way back to the colony, so it's important people don't disturbe their paths. Hence the slow moving ant sign on the start of the trail! Thought I'd share some pictures of our little mini adventure. What a neat day trip!

Saturday, March 29, 2008

There's one benefit to being so tired that you're asleep as your head hits the pillow—you sleep right through an earthquake.

Early this morning a magnitude 4.4 quake struck 40 miles (75 kilometers) north of Lima. Then, a few hours later, a 5.4-magnitude earthquake was observed by the U.S. Geological Survey just 10 miles west of Lima. Now, for our part, only a few of us felt anything in the hotel with the early quake. And, we were on the road to the airport by the time of the second earthquake. So, it wasn't that scary to our group.

However, the Associated Press is reporting that five houses collapsed in Lima, while traffic on the primary coastal highway was interrupted for more than an hour. We didn't even realize a quake had occured until we made it to the airport and saw the giant crowds outside that had been evacuated from the terminals after the second quake.

Never fear, we all made it to San Jose, Costa Rica safe and sound this afternoon. We have a day to rest up a bit, then it's more meetings Monday, a travel day Tuesday, Mexico City Wednesday and Thursday and then home again on Friday.

In our whirlwind tour of Lima, March 28, we met with three different millers who use U.S. wheat in their production.

First, we stopped by ALICORP, and spoke with Manuel del Campo, grain purchaser. ALICORP mills about 750,000 metric tons of wheat per year for the pasta and flour business. Then, we headed to MOLITALIA, and spoke with Jimmy Suni, general manager, and Javier Moarri, operations manager. Finally, it was off to Cogorno S.A., and a meeting with Andres Borasino, the general manager.

At each location, the trade team talked about how high wheat prices are affecting millers, the Peruvian free trade agreement, and the future acceptance of genetically modified wheat by Peruvian millers.

Here, del Campo and the trade team check wheat prices in his office on the visit to ALICORP. (Journal photo by Jennifer M. Latzke.)

Here are a few of the sights of Lima, most were taken from the interior of our van as we were headed from appointment to appointment. Such is the luck of a busy trade team!

With so much construction and updates to Lima, there is an ever increasing American presence on the billboards around town. Here's a familiar sign—for a John Deere dealership. Just proof that no matter where you go, agriculture is still the same.Next, is a picture of the gate to the Port of Lima. While there wasn't a lot of time to tour the port facilities, it was interesting to see them from outside the gate.

Our last appointment for the day was with Dr. Eduardo Ferreyros, the Vice Minister, Foreign Commerce and Tourism of Peru. Ferreyros and Alejandro Daly, the President of the Wheat Millers Committee, were part of the negotiations team for the Peru-U.S. free trade agreement. From left are Chet Edinger, Daly, Ferreyros, David Clough, and Richard Starkebaum.Finally, here's one of the many entrepreneurs who roam the streets of Lima, hawking everything from newspapers to ice cream. (Journal photos by Jennifer M. Latzke.)

Five meetings in one day. If we discovered anything about Peruvian wheat importers, millers and officials, it's that they are eager to do business with the world. And, American wheat producers have solid relationships to build upon when trading their products to this country.

Our Thursday morning (3/28) began with a breakfast meeting with Eugene Philhower, the agricultural attache for the U.S. Embassy in Peru. Philhower explained that Peruvians have a high consumption of pasta for Latin America, and they also have a diverse diet that includes rice and potatoes. Most importantly, though, Peruvians are including trying to include more traditional Peruvian breads in their diets.

The Peruvian Free Trade Agreement with the United States, Philhower said, is on its way to implementation. In the coming months the Peruvian Ministry will be wrapping up the implementation process. The agreement, which Philhower had a hand in negotiating, was embraced by most of the Peruvian agricultural industry.

"On the coast, where it's more of a desert and growers use water management to turn the desert into asparagus and avacado, dairy and grape production, the economy is booming," Philhower said. "In the Highlands, where it's more subsistence agriculture with local producers growing potatoes, corn and trees, many fought this ag agreement tooth and nail."

In the end, though, the agreement is a done deal and the country is preparing for implementation by reviewing and updating its own legislation, as well as updating its infrastructure. Peru is also working to comply with requirements for intelectual property rights protection, which should be implemented by July 1. The goal is to have everything in place by Jan 1, 2009.

"The advantage of trading agricultural products with Peru is that it brings a stable economy to foreign investors," Philhower said. Local growers can plan ahead and predictability in the market is good for them as well as for the country in general, he explained.

(I'm playing catch-up folks. Here are a few of the photos from our stop in Bogota, Colombia, March 27.)

I started out my morning with the news, only in Spanish. Here's the headlines for March 27 in Bogota. My Spanish is slowly getting better. Our U.S. Wheat South American Region Vice President Alvaro de la Fuente has been helping me. I'm sure he's tired of me and my Midwestern accent (a la Peggy Hill) but he's being a good sport. Our first meeting of the day was with our Agricultural Attache in Colombia, Richard Todd Drennan. Here, he speaks with USW Board Member David Clough, from North Dakota, and Russell Nemetz of Northern Broadcasting in Montana.As we stepped out of the hotel I finally had a good shot at getting this photo of one of the many horse-drawn carts that run on the roads in Bogota. I've never seen chrome rims on a buggy before, but there's a first time for everything!

We walked three blocks over to the offices of Felipe Laserna, president of CIGSA, a purchasing agency for 16 mills in Colombia. Here, Laserna explains the climate and logistics of moving wheat to and around Colombian mills, using a topographical map. From left, are Laserna, de la Fuente, Colorado USW Board Member Richard Starkebaum, and Clough.This was the sight from our hotel. The spired building is a convent at the top of this mountain overlooking the plains of Bogota.

So, here's some of the answers to some of our comments on the blog. Thought I'd post here so you can just get them all in one place.

First, our schedule is really TIGHT. For example, in Bogota, we had three meetings, but traveling across town takes an hour or so, in heavy traffic...and we had to fly to another country late that evening. In Lima, today, we had five hour-long meetings crammed into one day, and we still have to travel to another country. So, the schedule isn't really regular as far as posting. I'll be writing up full stories for future issues of High Plains Journal/Midwest Ag Journal, though. And, I'll be posting pictures tonight and tomorrow.

Tomorrow (3/28) we leave Lima early in the a.m. and hit Costa Rica (San Jose) around 1:30 p.m. Central or so. Two days in Costa Rica, then a day of travel on Tuesday, then Mexico City, Mexico Wed., and Thurs. with a full travel day home Friday.

Weather in Bogota and Lima was nice. Bogota was like spring in Kansas, just cool enough not to be too hot. Lima, though, was extremely humid. Anyone who's traveled to Eastern KS in August would understand...Lima's 10 times more humid.

Finally, the total wheat consumption for Colombia that they import is rather high. Let me check on the exact figures and get back to you. Good questions Everyone!

Remember, keep those questions coming, and tell your friends to follow along on our journey to Costa Rica and Mexico this coming week at www.hpj.com!

Friday, March 28, 2008

Anyone who's traveled with me knows that I don't mind an adventure. As long as I can get some good laughs out of it!

Our flight to Lima was wonderful. But, the airport in Lima was an entirely new experience.

First, because of what I can only assume is airport construction, we didn't disembark at the terminal. Instead, the plane opened up both the front and back doors, set up some stairs, and we all deplaned and moved into two buses that took us and our carry-ons to the terminal.

Okay, so no big deal. But, then, we get to the Immigration desk, and that was an hour-long line. Seriously, folks, one hour. They had a line with barriers set up like Disneyland, and we all schlepped our stuff through the line, back and forth, back and forth, until we got to the passport checkers.

And, in this time period, we had to fill out paperwork that asked questions like my marital status, and my occupation... why does the Peruvian government care that I'm single and a journalist? But, oh well, we filled them out, and made it through.

But the adventure wasn't over. We finally get to baggage claim, and just on the other side there is a SEA of people waiting for the SEA of people coming off planes. It was like we were conquering heroes, fresh from war. People with signs with names on them... Limo drivers, taxi drivers, parents, little abuelas and a TON of children.

The children, we soon learned, were there because of some celebrity who's plane had landed about the same time as ours. I'm guessing by the decibel level that it was some boy band, but I could be wrong.

We found our driver, and after 15 minutes of "farmer engineering" we managed to cram our luggage and eight passengers into a six passenger van. I'm now awfully close with my fellow travelers.

We got to the hotel, checked in, and had four hours of sleep or so before we kicked off our long day in Peru.

Lesson for the day? Not one really. I did find out that at 1 a.m., in a crammed van, your sense of humor becomes entirely too bizarre. Oh, and sleep never feels so good as when you've been traveling all day.

Columbia

Hablas espanol?

In mid-February I received an incredibly generous invitation to be one of a handful of American agricultural media invited on a two-week tour of four Latin American countries' wheat facilities March 24 to April 4.

We'll be spending a whirlwind time in Colombia, Costa Rica, Peru and Mexico, speaking to the folks importing and using the wheat we grow. It's going to be an amazing learning experience.